French Altarea 2017 FFO climbs one-third to €256m; outlook never so good

French listed group Altarea Cogedim ended 2017 well ahead of plan, with recurring FFO one-third higher at €256.3m and diluted net asset value up 9% to €174 per share. It proposed a dividend raise to €12.50, and said the outlook has never been this good.

"Having raised our FFO guidance for 2017 from €14.50 to €16 per share last May, we ultimately reached €16.42, for a record increase of 20.7% over one year," said Founder and Chairman Alain Taravella in a release. "All business lines contributed: Residential and Office of course, but also Retail, the model for which now incorporates a growing component of property development."

The Paris-based firm, which he started in 1994, is also ahead on strategic objectives. "Altarea Cogedim is the leading property developer in France, all categories of assets combined, with a consolidated pipeline of €17.1bn in potential value." It has gained leadership in large mixed-use projects, in particular which concentrate group skills, "and represent the future of our cities."

The company is both a commercial land owner and developer, operating in all three main classes of property: retail, residential and office. With operations in France, Spain and Italy, it manages a shopping centre portfolio of €4.8bn. It ended the year with a market capitalisation of €3.3bn.

On its financial targets, its easy outperformance of guidance set in May was due to all business lines: Residential and Office, but also Retail, the model for which now incorporates a growing component of property development. "This tremendous success is primarily the result of the talent and work of the women and men at Altarea Cogedim," Taravella said.

Defining Altarea Cogedim as an Urban Entrepreneur, he said: "Our group strives to rebuild the urban connections between the centre and the outskirts of gateway cities and entrench its economic and environmental impact over the long-term. We are particularly proud of being both an economic driving force for the French economy .. and the leader among property companies in terms of sustainable development."

Looking ahead, Taravella said the outlook has never been this good, and its operating income is set to increase significantly over the next three years. Thus, the group has set itself an FFO target on the order of €300m by 2020, taking into account the growing level of tax on its non-REIT/SIIC business.